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PE2’s are the opposite of PE1’s. These are items whose demand is much lower than the average in the previous period. Like PE1’s demand spikes, these dips in demand will occur from time to time. It is essential to understand that this is likely a rare occurrence and no change will be needed.
PE1’s are products whose demand is much higher than the average in the previous period. These spikes in demand will occur from time to time. It is essential to understand that this is likely a rare occurrence and you will rarely need to make a change. Changing the average every time there is a spike will throw off your inventory levels because the product’s demand will most likely return to normal. If you know the product will have increased demand in the future because of a new customer you can then adjust the average using the edit history function.
The Tracking Signal displays the strength of the positive or negative trend. The higher the tracking signal, the more weight will be used for the newest period of demand. Some products will have a high forecast error that is more often above or below the product’s average. When this happens, we increase the smoothing factor so we can react faster to the trend. In
If you order a supplier more than once a week, but you do not want to use Daily Replenishment, you can use the Variable Order Cycle. Variable Order Cycle is similar to a fixed cycle, but is used instead when you order more than once per week. Follow the steps below to set up the Variable Order Cycle.